TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 1679
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....ined money under Section 69A of the Income Tax Act, 1961 [hereinafter referred to as "the Act"]. The addition was originally made u/s.143(3) of the Act by the Assessing Officer [hereinafter referred to as "AO"] vide his order dated 26/12/2019. Facts of the case: 2. The assessee, Jaykumar Nemichand Jain HUF, is engaged in the business of trading gold, gold jewellery, silver, and silver jewellery under the firm name M/s. Jain Silver Palace. The assessee filed its return of income for the AY 2017-18 on 19.06.2017, declaring a total income of Rs.5,60,120/-. The case was selected for scrutiny under the Centralized Processing of Scrutiny Cases (CASS) due to large value cash deposits made during the demonetization period (09.11.2016 to 31.12.20....
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....ver, some parties did not respond, and those that did respond failed to provide the necessary quantitative details for cross-verification. The AO observed that the assessee made purchases of bullion and jewellery from vendors before the demonetization period but made payments only after demonetization. Additionally, despite having substantial cash in hand during October 2016 and on 08.11.2016, the assessee neither deposited this cash in the bank nor used it to pay its vendors, which was abnormal in a bullion/jewellery business where immediate cash flows are crucial. Based on these findings, the AO concluded that the cash deposits of Rs.55,00,000/- during the demonetization period were not satisfactorily explained. Therefore, the AO invoked ....
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.... has now filed the present appeal before us with following ground of appeal: 1. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition of Rs.55,00,000/- as unexplained money u/s 69A of the act? Further, appellant craves leave to add, amend, alter or withdraw all or any ground of appeal. 5. During the course of hearing before us, the Authorised Representative (AR) of the assessee reiterated the facts and stated that the assessee submitted entire cash book for the Financial Year (FY) 2016-17 to the AO which has not been doubted by the AO. The AR further stated that the along with details of tax audit report, the copies of VAT return and VAT audit report was also submitted to the AO. T....
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.... afterthought. The assessee maintained that cash sales below Rs.2 lakhs are a regular practice in their business. The appellant provided copies of cash books and cash sales invoices to show that the sales were genuine and duly recorded in their books of account. The assessee highlighted that the VAT department accepted their quarterly VAT returns, and there were no queries raised regarding sales transactions or turnover. 5.3. The AO noted that although the assessee had substantial cash on hand during October 2016 and on 08.11.2016, the cash was not immediately deposited into the bank, which was abnormal for a bullion and jewellery business. The assessee explained that due to heavy customer rush during Dhanteras and Diwali, they could not f....
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....6. The Departmental Representative (DR), on the other hand, relied on the orders of the AO and the CIT(A) and pointed out that the cash book for AY 2016-17 was not submitted by the assessee and notices u/s.133(6) of the Act were not complied with. 7. The AR stated that the counter confirmations were submitted in case of some parties from whom purchases were made. The AR placed reliance on following judicial precedents: - Sobha Devi Dilipkumar Vs. ITO [2024] 160 taxmann.com 1249 (Vishakhapatnam Trib.). - ACIT Vs. Chandra Surana [2023] 149 taxmann.com 379 (Jaipur Trib.). - ITO Vs. J.K.Wood India (P.) Ltd. [2024] 158 taxmann.com 208 (Delhi Trib.). - ACIT, Central Circle-1 Vs. Hirapanna Jewellers [2021] 128 taxmann.com 291 (vishakha....
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....s without raising any queries. Importantly, the AO did not dispute the stock records, and no discrepancies were found in the books of account, which remained intact and were not rejected. - The AO invoked Section 69A of the Income Tax Act, claiming that the cash deposits represented unexplained money. However, the assessee contended that the cash deposits were duly recorded in the books of account and backed by legitimate sales, making the application of Section 69A inappropriate. It was emphasized that once the sales were recorded in the books and offered for tax, taxing the same under Section 69A of the Act would amount to double taxation. 8.1. The assessee relied on various judicial precedents, including Sobha Devi Dilipkumar vs. IT....